Companies that specialise in one or select number of services have come up, intensifying competition with those that dominated before. KKLogit for example specialises in provision of cash-in-transit services, challenging industry leaders like G4S, Wells Fargo and BM Security Services.
I am always interested in PSC or PMC news in other parts of the world, so here is a story about the market in Kenya of all places. What is really neat about this particular story is the idea of the small companies competing and taking market share from the big companies. That these smaller companies are focusing on a particular niche, and marketing themselves as the best at that particular niche–like cash transits. The larger companies might provide the same service, but maybe not at the same level of quality or cost as a small company can. The larger companies also might not have the support of the local populations, because they might seem like one of those evil ‘foreigner mega-corporations’ coming to take business from the little guy.
This also reminds me of classic Sun Tzu or military strategy where you attack weakness with strength. Another way to look at it is guerrilla warfare for business, and these smaller companies in Nairobi are figuring this out. That they may not be able to compete against a G4S type company directly, but they certainly can compete against G4S in a very specific market. But that smaller company has to be able to prove that they are the better company for these specific deals.
And to be able to prove that they are the better company requires an excellent strategic communications plan, and quality control for services rendered. So with smaller companies that can more easily monitor all aspects of their business, and can be more personal online in places like Facebook, might have an advantage here.
A smaller business might also be more appealing to a client if they are opposed to supporting large foreign corporations. So Walmart might sell watches, but if you can buy the same watch at the same price at a small mom and pop watch shop, that might have even more of a selection of watches than Walmart–then why support that foreign mega-corporation with your business? Or, if that mom and pop watch store is better able to connect with the local population than the mega-corporation, then that will help too. These are the kinds of ‘small guy versus the big guy’ communications and strategies a small company can do in a market like this.
A final note for this article, is that it is filled with the names of some interesting PSC players in Kenya. G4S, KKLogit, Wells Fargo, BM Security Services, Salama Fikira, and Senaca to name a few. Check it out. –Matt
Training at Senaca Security Services in Nairobi. Intense competition in the private security market is pushing service providers to turn to marketing and public relations to boost their visibility in the marketplace. File
Security firms hustle to get noticed
By STEVE MBOGO
August 8 2011
Intense competition in the private security market is pushing service providers to turn to marketing and public relations to boost their visibility in the marketplace.
Previously, firms such as G4S Security, KK Security and Wells Fargo seldom bothered about publicity and often relied on walk-in clients and recommendation from their clients to net in new clients, especially corporate customers.
But competition from the top players and new entrants such as Senaca and more visible Brinks Security has forced a change in strategy and the market leaders are racing to grow and defend their marketshare.
As a result, the firms have set up or an in the process of setting up fully fledged communication departments as arsenal for market growth.
Mr. Asadi said. To avoid angering allies, Mr. Maliki, who is also acting defense and interior minister, may opt to bypass parliament and have his ministries sign agreements with Washington for 2,000-3,000 US trainers, sources have said. Mr. Asadi said the US embassy had already signed a contract with Triple Canopy security company to secure facilities and the training mission personnel.
Interesting news and I didn’t know about the Triple Canopy deal. Or maybe I just forgot, but still, that is a pretty big contract for the company if this happens.-Matt
Iraq’s interior ministry plans to sign a deal with the US government to supply scores of US civilian security personnel to train its troops, a senior Iraqi security official said. The agreement, which requires Iraqi cabinet approval, would mean the interior ministry at least will have little need for US troops to stay on beyond their planned year-end withdrawal, senior ministry official Adnan Al Asadi told Reuters.Iraq wants the United States to supply several thousand trainers for its military, sources have said, but is still debating whether to ask Washington to leave some troops behind for training, especially to fill gaps in their capabilities.
Right on, and this is great news that countries are now starting to wake up about this stuff. I also think that this move to put armed guards on boats and backing that up with legal authority to do so, is actually helping to fuel the opinio juris of the world body that armed security is a good idea on these boats. If Italy or Norway thinks it’s a good idea, then other countries might be more inclined to do the same thing. I have also seen this change in attitude with places like the UN, Germany and the UK.
Now will armed guards on boats, eventually lead to states granting Letters of Marque? Who knows, but as armed guards on boats present certain unavoidable situations (like taking prisoners after sinking a pirate boat, killing pirates, killing innocents, clashes with other navies or armed guards, etc.) then further legislation might lead countries to just go back to the tried and true license called the LoM. In other words, if the sum of all of the laws created over time add up to being just a basic LoM, then why not just implement the LoM?
The Declaration of Paris (DoP) is old and outdated, and as we put more private armed guards on boats and states continue to pass laws allowing for such things, then why hold to the DoP? Especially as pirates continue to flourish, and navies continue to fail at stopping this virus. Stuff to think about, and bravo to Italy and Norway for doing the right thing. –Matt
The Italian Decree no. 107, dated 12 July 2011, (Italian only) states the general principles of the deployment of military forces or private security guards onboard Italian Ships.
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Norway
On 29 June 2011, the Norwegian Government announced a new framework on the use of armed guards by amendments to Regulation 972/2004 on ship security and amendments to Regulation 904/2009 relative to arms. The changes came into force on 1 July 2011.
The new framework follows the IMO guidelines, and allows Norwegian owners to have armed guards onboard in a certain geographical area within the legal limits laid down. An owner wanting to place armed guards onboard must apply for authorization with Norwegian Police Authorities and provide necessary documentation to the Norwegian Maritime Directory. However, the owner is required to conduct an independent risk evaluation to prove the need for armed guards. In addition the owner must be able to show the Security Company’s documentation on procedures for training, qualification and storage and use of weapon.
The simultaneously issued Provisional Guidelines the use of armed guards offer practical guidance on the interpretation of the new framework.
The minister of Trade and Industry states in a press release (Norwegian only) that the amendments do not imply an encouragement to have armed guards onboard Norwegians ships. The purpose is to control the selection and use of security companies to ensure the safety of Norwegian ships and their crew. He emphasizes that all other efforts to protect the ship and its crew must first be fulfilled before armed guards are used.
Link to post here.
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These two deals I posted below are separate interviews, but they give you a good idea where G4S is standing right now. This company is amazingly large and successful. Not only is it the largest PSC in the world, but this company is the world’s second largest employer, right behind Walmart. That is impressive.
The thing I clued into is their business in the Middle East. That Saudi Arabia and the UAE were their top customers. The trend here, is these countries are serious about their security, and threats against oil and business are what drives this interest in security.
Mr. Buckles, whom used to work for Avon as an analyst, also mentioned in the interview the key to success for the company and why he stuck around:
‘The sensible one is that Securicor had a policy of developing internal talent and offering prospects for rapid promotion. But there was also the offer of a Ford Escort. A company car for a young guy was very attractive,’ he says. By 2005, he headed G4S. ‘The rules of best practice are the same for all businesses, including supplying security,’ he says. ‘Take staff with you by rewarding achievement, identify new markets, manage risk while taking up opportunities, understand your customers and have a strong culture of ethical dealing. Applying these principles has been key for me.’
That is an interesting list, and many of these ideas are just another way of saying ‘take care of your people’ and ‘customer service and satisfaction’. But he also focused on managing risk, which is cool. G4S has certainly gobbled up many companies in a short period of time, and because of the current global chaos and government austerity moves, their timing has been excellent. In other words, they positioned themselves with enough services to take advantage of increased security related opportunities. They have also been profitable during a time when many companies in the world are hurting.
And to further the theme of taking care of your people. When G4S goes into a new region, like Latin America, and they become the best paying gig in town, then of course that company becomes the popular choice of the locals. I guess they have learned the lesson of ‘pay better than the next guy, if you want to attract the best’. Which is great, because if you pay peanuts, you will get monkeys. Paying better and good training are both key aspects of keeping your folks happy, along with providing excellent leadership. Here is the quote:
Unlike most FTSE 100 chief executives, Buckles, 50, has responsibility for staff working in high-risk situations, so how does he handle the stress? Looking relaxed at G4S’s headquarters in Crawley, West Sussex, he says: ‘The best training is provided and every assignment is assessed for risk and ways of minimising it. Pressure comes with the job, but I’ve been in the security business long enough to know the importance of teamwork and good communication to ensure we are on top of every contract.’ G4S revenues rose by 4.7 per cent in the first three months of the year, driven by the emerging markets of Africa, Asia and South America, where demand is rising for expertise in areas such as moving cash, guarding airports and providing personal protection. ‘In some developing countries we are seen as a stronger force in terms of training and pay than local police and a better option for providing security,’
The mention of South America also coincides with what the Small Arms Survey mentioned about Latin America. That PSC’s there are the most armed in the world, outside of the conflict zones. Security is huge business in Latin America, and especially because of the drug wars and poor economy. Speaking of which, G4S is also active in Iraq and Afghanistan. So they are definitely intertwined in many aspects of the industry.
Of course there are also incidents where G4S has had some hiccups. This is the extreme challenge of the ‘head knowing what the tale is doing’ within such a large company. For a smaller security company, the ability to manage and watch each contract is a little easier than for a large mega-corporation to do so. Given that set of circumstance, G4S has done remarkably well. That doesn’t mean they haven’t had their share of issues come up, but still, for it’s size and exposure to risk, it has navigated those issues very well. Ask yourself how much negative news you hear in the media about G4S, compared to other much smaller companies, and you can see what I mean?
Finally, the one thing that I think is really important to emphasize, and some companies have a hard time understanding this. You can assemble a great team, pay them well, be an outstanding leader for them, etc., but if you don’t have some kick ass marketing and sales personnel hunting around for new contracts and actually winning them, then the company will not expand and get more revenue. Why is that important? Well, in order to pay those great salaries, offer good training, and attract kick ass leaders, then you need some cash coming in. Malcolm Gladwell identified these folks as the ‘salesmen’ in his book the Tipping Point:
Chapter 2: The Law of the Few: Connectors, Mavens, and Salesmen The attainment of the tipping point that transforms a phenomenon into an influential trend usually requires the intervention of a number of influential types of people. In the disease epidemic model Gladwell introduced in Chapter 1, he demonstrated that many outbreaks could be traced back to a small group of infectors. Likewise, on the path toward the tipping point, many trends are ushered into popularity by small groups of individuals that can be classified as Connectors, Mavens, and Salesmen. Connectors are individuals who have ties in many different realms and act as conduits between them, helping to engender connections, relationships, and “cross-fertilization” that otherwise might not have ever occurred. Mavens are people who have a strong compulsion to help other consumers by helping them make informed decisions. Salesmen are people whose unusual charisma allows them to be extremely persuasive in inducing others’ buying decisions and behaviors. Gladwell identifies a number of examples of past trends and events that hinged on the influence and involvement of Connectors, Mavens, and Salesmen at key moments in their development.(from wikisummaries)
These salesmen are a vital component of any company. To put a former security contractor or a military guy in such an important position is a nice gesture, but if they do not have the talent to do the job, then you will not get the contracts. What you really need is a professional with a gift, who can ‘sell snow to an Eskimo’ as they say. (like maybe an Avon salesman? lol) It also reminds me of a quote that Donald Trump made recently about negotiators. Here it is:
“You know, I can send two executives into a room. They can say the same thing. One guy comes home with the bacon and the other one doesn’t. And I’ve seen it a thousand times. It’s the messenger.”
The question a company should ask is do they have the right messenger, negotiator, or salesman to win that contract for the company and increase that company’s standing in the market? And to bring this back to G4S, they obviously have some very talented people working on this for them. –Matt
NICK BUCKLES INTERVIEW: I deal with trouble in Kabul, Baghdad …and Wimbledon
By David White
18th June 2011
As the world’s top tennis players and half a million fans prepare for the glamour and glory of the 125th Wimbledon tournament starting tomorrow, their safety will be in the hands of Nick Buckles.
‘There will be 700 uniformed staff to search vehicles and bags, check tickets and provide on-court protection and escorts for players,’ says the boss of G4S, the world’s biggest private security company.
Iraq as a democracy in our own image is a foolish dream. The State Department will now be expected to be the firewall against its descent back into chaos. Be ready with the fire hoses … um, sorry, Congress had just slashed the money for the fire hoses. –Diplopundit
What I wanted to point out here is that there are several forces that are at play, that might result in contributing to DoS and WPS failure. Congress has never really been excited about funding DoS and has always thrown way more money at defense related initiatives. (thanks to defense industry lobbyists). To get Congress to recognize the value of DoS is like pulling teeth. But folks like the DoS are essential to soft power initiatives and solving problems diplomatically, as opposed to killing people in costly wars. Remember that whole Sun Tzu quote about winning a war without fighting?
With today’s penny pinching endeavors as a result of the economy, or lack of a coherent energy policy, or the cost of fighting two ‘costly’ wars for close to ten years, there is more of an effort to cut costs. Which is good to a point, and I would love to see government get smaller and more efficient. But common sense should be applied to some of these cost cutting initiatives, and especially where lives are on the line.
There are some areas that should not be cut or messed with, because the consequences of not properly funding these functions of government could have grave consequence. Specifically, the DoS mission in places like Iraq or Afghanistan. And to really boil it down, when agencies get less money to effectively handle projects that are vital to the stability of an already weakened country like Iraq, then you start to see the really negative effects. Things like a lack of, or poor condition of equipment or weapons for security contractors. Or the amount of oversight decreases or is not fulfilled, because there is no money for such things.
The other forces at play is the public desire to just pull out of these wars, and not care about these programs that we have invested billions of dollars in. This public opinion fuels Congress, and in order to politically survive, they must meet the demands of the public. That is democracy, but it also could lead to half measures or poorly funded programs that really do need sufficient support in order to be successful. I will not sit here and say we should do one thing or the other, and my only goal here is to show the potential consequences of such things. I would hate to see this industry get thrown under the bus once again, all because of the politics of the war.
Which by the way, I really would like to hear more from the WPS folks, both DoS and contractors, as to how your program is going? The public and this industry needs to know if your operations are negatively impacted because of these political factors. I will really be mad and sad, if men and women die or get hurt because of these poorly funded and managed initiatives. You are either all in, or all out, and half measures and poor funding can have dangerous consequence. Congress and the public needs to hear it as well.
Another point I wanted to make is WPS will be vital for the ‘other’ DoS missions out there as a result of the Arab Spring. The cards are being re-shuffled in the middle east and diplomatic missions in these countries will be vital for national interest. These are dangerous times, and security for these diplomatic missions is essential. Congress should do all it can to ensure DoS and it’s security apparatus is successful, because lives and national interest are on the line.
Oh, and the main stream media might be easily influenced by the winds of politics, but this blog is not, and I am concerned with the reality on the ground. I want to know if this industry is getting a fair shot at success out there, or if they are being set up for failure. Of course I want our industry to provide an excellent service to it’s clients, but I am also wary of the factors that are out of the hands of private industry. That way, at the end of the day, we can point the finger at what really was the cause of failure as opposed to letting folks with personal or political agendas define the causes and reasons for failure. Please check out the four articles I have posted below, and let me know what you think? –Matt
Budget woes poised to hit State Department hard
By KATE BRANNEN
June 2, 2011
The State Department’s budget has already taken a hit in 2011, but it appears that its finances will be squeezed even tighter just as the department is trying to regain ground lost to the Pentagon over the past decade.
In the final budget resolution passed for 2011, Congress agreed to provide $48 billion for State and foreign operations. This marked an $8.4 billion reduction from the president’s budget request. It was also $504 million less than the department received in 2010.
For 2012 spending, the House Appropriations Committee announced that it plans to cut $11 billion from the State Department and foreign operations budget request of $47 billion. This includes funding for the U.S. Agency for International Development.
